Human Capital Diversity and Comparability of Accounting Information of Quoted Manufacturing Companies in Nigeria

Abstract

Human Capital Diversity and Comparability of Accounting Information of Quoted Manufacturing Companies in Nigeria 1. IntroductionComparability is the level of standardization of accounting information that allows the financial statements of multiple organizations to be compared with each other and this is a fundamental requirement of financial reporting that is needed by the users of financial statements. Comparability facilitates benchmarking across firms which ensures that investors can access more relevant peer and overall industry information. It also lowers investors' firm specific information processing costs and thereby facilitates a more precise valuation of financial information.Financial statements should always be compared to assist stakeholders in determining the performance of the organisation. The statement should possess the qualitative characteristics of accounting information which will help the stakeholders make necessary decisions based on the performance through comparison at every point in time (Farouk, Magaji & Eega, 2019). Comparability improves usefulness of financial statements because it allows users to carry out trend analysis, cross sectional analysis and common size analysis. Trend analysis helps to see whether a company's position and or performance has or have improved across time (Soyemi & Olawale, 2019). This means that information must be comparable to the financial information presented for other accounting periods, so that users can identify trends in the performance and financial position of the reporting entity.In Nigeria, firm's financial reporting issues and different degrees of scandals were prominent in different sectors of the economy. In the year 2012, it was reported that 45 banks were involved in unethical practices which led to their liquidation between 1994(Egbo, 2012. Among the companies affected are Savannah Bank, Cadbury Nigeria Plc and Lever Brothers. In Nigeria, the corruption in Cadbury led to loss of confidence of the public and investors which affected the reputation of the company. As a result, the reputation of the company was severely damaged to the extent that most investors withdrew their investments. Also, in 2002, the license of Savannah bank was withdrawn due to fraudulent activities, mismanagement, corruption and other unethical practices by the bank officials' poor, liquidity and unavailability of adequate credits to deserving customers.

Book value and share prices: The mediating effect of inflation in Nigeria

“…Similarly, the sum of the cumulative retained earnings and other entries under stockholders' equity is the book value of the entity's equity, which was reported by Djalil and Tabrani (2016) as the amount of shareholder equity reported, which is reduced by preference shares reported in the statement of financial position. In a related discuss, Osundina, Jayeoba, and Olayinka (2016) stated that book value per share represents the value of own funds of a company per share and it expresses the worth of each share in a company. Subramaniam and Tharshiga (2013) note that book value per share is an essential variable in determining firm value.…”

Mediating Effect of Inflation on the Relationship between Earnings and Share Prices of Listed Firms in Nigeria

“…They further stated that earnings per share is a carefully scrutinized value that is often used as an indicator of company's profitability. Osundina et al [3], while adopting the definition of earnings per share according to IAS 33, sees EPS as the amount of current period earnings or profit (or loss) attributable to a unit of ordinary share. Again, Prewysz-Kwinto and Voss [4] consider EPS as a very popular ratio which investors use to measure the potential profit on company's shares and stated that one of the main requirements contained in IAS 33 with respect to EPS is the computation of two values of EPS in the financial statements -basic and diluted.…”

Annual Accounting Information and Stock Price Reactions: Evidence from Nigeria Deposit Money Banks in West Africa

“…This implies that high Earnings per Share (EPS) designates that the financial institution is more lucrative and has more earnings to allocate to its shareholders. Osundina, et al (2016), asserted that earnings per share are a digit unfolding a public financial institute's profit per outstanding share of stocks, calculated on an annual or quarterly basis. EPS is obtainable by dividing a company's annual or quarterly net income by the number of its outstanding stocks.…”